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683 A meeting of the Board of Governors of the Federal Reserve SYsteinwas held in Washington on Saturday, May 8, 1943/ at 11:30 PRESENT: Mr. Mr. Mr. Mr. Szymczak McKee Draper Evans Mr. Morrill, Secretary Ur. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Smead, Chief of the Division of Bank Operations Mr. Leonard, Director of the Division of Personnel Administration Mr. Vest, Assistant General Attorney Mr. Van Fossen, Assistant Chief of the Division of Bank Operations Mr. Hammond, Chief of the Correspondence and Publications Section of the Secre— tary's Office Before this meeting each member of the Board had been furnished th a Inemoran'durn dated April 15, 1943, which had been prepared by a €N141 Qf the Boardts staff and which submitted for consideration by the lioarci a ciraft of proposal to make available, within the Federal Reserve "L 8Ystem, to the employees of the Board of Governors (other th4lthose Who retain membership in the Civil Service Retirement System) retIrternent benefits equivalent to those to which the employees would be "&tied t. if they were members of the Civil Service Retirement System. 4-tached to the memorandum were: 2, -acplanatory abatement for the information of the employees f the plan receives the favorable considerLtion of the Board; .l'aft of resolution of the Board of Governors embodying 'he Plan, to be known as the Board of Governors Plan; 684 443 3. 4. Proposed amendment to the rules and regulations of the Federal Reserve Retirement System to enable the Board to adopt such a plan; and Draft of form to be executed by members of the Retirement System who elect to accept the plan. he m. '111°randum stated that before the plan was adopted and formally subktted + . 0 the employees it was believed desirable, if the Board were favor able to the proposal, to ascertain informally what comments, if any, he ' 44P1°Yees' Committee might wish to have considered and also to obtain su ggeetions that Mr. Rounds, Chairman of the Retirement Committee, 611c1 theetirement System actuary and counsel might desire to submit, the u nderstanding that if all the preliminary steps could be taken betore jUne 1, 1943, the plan would become operative on that date. tict There was a discussion of the proposal in the light of informa- °Mained in the memorandum, during which it was stated that the Propos ecl l'evision of the Retirement System as applied to the Federal Rere 8 allks had not yet been finally acted upon by the Presidents' Conteren cef that the proposal with respect to benefits for the Board's em111°Yee s contemplated that each of the present employees (not including 41111°Ye es who are now members of the Civil Service Retirement System) Woikba halre the option of (1) continuing under the present plan, (2) accep • tlng the new Reserve Bank plan, or (3) accepting the new Board Ple4, /lot bearlci that, therefore, It was contemplated that the proposal would ellbmitted formally to the Board's employees until after action be en tat, -en by the Presidents' Conference. Ur. AucKee expressed the opinion that the action should be taken bY the pr. eeidents' Conference at the earliest possible date in order 685 5/8/43 _3— that the revised program might be put into effect as promptly as pos— eible ) and the other members present concurred in this opinion. At the conclusion of the discussion, all of the members of the Board present stated that they were in favor of the adop— tion of the proposal for the Board's em— ployees as outlined in the staff memorandum, and it was understood that Mr. Morrill would take the matter up with Messrs. Eccles and Ransom upon their return to the office on May 10, 1943, and that the proposal would be discussed with the Employees' Committee, Mr. Rounds, and the Retirement System's ac— tuary and counsel as suggested in the staff memorandum. Secretary's note: In accordance with the above understanding, Mr. Morrill re— ported subsequently that Messrs. Eccles and Ransom concurred in the action that had been taken by the other members of the Board. At this point, Messrs. Smead, Leonard, Vest, Van Fossen, and 11411140nd witha rew from the meeting, and the action stated with respect to each of kart, : the matters hereinafter referred to was then taken by the The • minutes of the meeting of the Board of Governors of the Pfm,teral R eserve System held on May 7, 1943, were approved unanimously. that Memorandum dated May 72 1943, from Mr. Morrill, recommending P. Jordan be pointed operating engineer in the Building Op— eration and Maintenance Section of the Secretary's Office on a tempo— basis for an indefinite period, with basic salary at the rate of 411e6° Per annum, effective as of the date upon which he enters upon the 'Petsforinance of his duties after having passed satisfactorily the PhYsical examjiation. Apnroved unanimously. 686 5/8/43 -4Memorandum dated May 5, 1943, from Mr. Goldenweiser, Director qthe 1)1vision of Research and Statistics, recommending that Miss 14ar garet F. Mills be appointed as a clerk-stenographer in that Division, with basic salary at the rate of 61,440 per annum, effective as of the date, "Pon which she enters upon the performance of her duties after hayPassed s atisfactorily the usual physical examination, with the unclerstarle;• --14g that if anything derogatory should develop in the investigatio4 of her references her services may be terminated immediately. Approved unanimously. Letter to Mr. Mulroney, Vice President of the Federal Reserve or Chicago, reading as follows: ter "In accordance with the requests contained in your let4E2r 5, 1943, the Board approves the appointments of Matthew 1, Lynch, John A. Shinn, and Harvey J. Wishart, at Present assistant examiners, as examiners for the Federal Rewh/Z1 tk of Chicago. Please advise us of the dates upon appointments become effective." Approved unanimously. Chica Letter to the board of directors of the "Austin State Bank", : 01 1z stating that, subject to conditions of membership -ered 1 to 6 contained in the Board's Regulation H and the follow8Peeial condition, the Board approves the bank's application for kekb ot in the Federal Reserve System and for the appropriate amount stc ek in the Federal Reserve Bank of Chicago: 117 . Prior to admission to membership, such bank, if it has already done so, shall charge off or otherwise e1 the remaining $1,200 estimated losses in loans lais shown in the report of examination of such bank as of arch 29, 1943, made by an examiner for the Federal Reserve Bank of Chicago." 687 518/43 -5-Approved unanimously, together with a letter to Mr. Young, President of the Federal Reserve Bank of Chicago, reading as follows: "The Board of Governors of the Feaeral Reserve System approves the application of the 'Austin State Bank', Chicago, for membership in the Federal Reserve System, subject to the conditions prescribed in the enclosed letter which You are requested to forward to the Board of Directors ul the institution. Two copies of such letter are also enc "ed, one of which is for your files and the other of which You are requested to forward to the Auditor of Public Accounts or the State of Illinois for his information. th "It has been noted that you will follow the matter of a e bank's bringing into conformity with the provisions of law nd the Board's regulations the savings accounts listed on Page 16( 1\ ) of the report of examination for membership." R Letter to Mr. 'rimble, Assistant General Counsel of the Federal eSe Pit. " re Bank of New York, readin,; as follows: 141, "In reply to your tetter of May 1, 1943, addressed to a * Vest, regarding proposea amendments to the guarantee 17P‘eement in the case of the guaranteed loan made to the i:reY-Shea Bag Corporation of Elizabeth, New Jersey, there Li enclosed a copy of a letter which we have received from utenant Colonel Paul Clevelana of the iNar Department with respect to this matter. "It is noted that Colonel Cleveland's letter does not Cover the question raised in the last paragraph of your letter the aaaition to the guarantee agreement of nia ctiarci conditions (A) to (F), inclusive. We will commu-'e further with the War Department regarding this point." Approved unanimously, together with the following letter to Lieutenant Colonel Paul Clevelanu, Chief of the Loan Section, Advance Payment and Loan Branch, Fiscal Division, ivar Department: trtlie have received your letter dated May 5, 1943, in aritQP°riee to an inquiry made by Mr. Rufus J. Trimble, Assistre8,General Counsel, Federal Reserve Bank of New York, with agr-vect to certain proposed amendments to the guarantee Vare"lent in the case of the guaranteed loan made to the eY-Shea Bag Corporation of Elizabeth, New Jersey; and 688 518/43 -6- "we have transmitted a copy of your letter to Mr. Trimble. "it is noted that your letter apparently does not ,7,over the auestion raised in the last paragraph of Mr. :!?Ible l s letter of May 1, 1943, with respect to the adto the guarantee agreement of standard conditions (A) to (p, e will be glad to have any com) inclusive. ments you may wish to make regarding this point. this connection there is enclosed a copy of a letter received from Mr. Trimble dated May 6, 1343, with further reference to this case, transmitting copies of the , °1111 of proof of claim which the financing institution prov?ses to file in the pending bankruptcy proceedings. It Ill be appreciated if you will advise us whether the War Department has any objection to this form." Letter to the Presidents of all the Federal Reserve BEnks, readas follows: "The Board's letter of January 26, 1943 (8-612) requested reports on the enforcement activities of the Federal Reserve 1,, ± r 8 in connection with ILegulation W. The first of these rerts covered the period ending January 31, 1943, and the sec`41d will cover the three months ending April 30, 1943. The first reports were very helpful not only in their Zesentation of information as to the scope of enforcement thethe various districts but also in the light they shed upon effectiveness of the regulation and its acceptance. It understood that the reports of some.and perhaps all of the 4,e:dem," Banks have been made available to the other Reserve 13arod. it78* This would appear to be a desirable procedure since to give each Reserve Bank an iaea of the general r„!`llre better than any condensed summary which could be preWed here and at the same time makes available to each ReTh : ve Bank details respecting the experience of the others. rePorts show a larger amount of activity by some Reserve 1:!Ks than by others, but this difference may be due in a vaqe measure to different conditions existin.7 within the rsce°11s districts. This is a matter which will of course continuin4 consideration. itie The Board has noted from the reports that the activprops of the other agencies cooperating in the enforcement the ril may have varied considerably. It is assumed that thes"'eserva banks will be in sufficiently close touch with the agencies on an informal basis to enable them to keep thesBoard advised of developments in the fields covered by e other agencies. pi ! erVeS 689 5/8/43 -7- "Several comments made by the reserve banks have to do With provisions of the regulation which, in the light of enforcement experience, may possibly require amendment. These relate in particular to the distinction between 'charge sale' and 'instalment credit', the exemption of items costing $6.00 or less from the down payment requirements, and the use of coupon books. All of these matters, together with a number Of others, are being given further study here. "In future reports it may be that some or all of theRe}e,rve Banks will prefer to use a modified method of reporting e -letr_ information called for by items 4 and 6 of the Board's of January 26, 1943. In lieu of the number of accounts Q,LIF tr ansactions investigated and the number of violations, there could be substituted the proportion of accounts or trans8?tions investigated that were found to be noncomplying, clasiied into instalment sales, charge sales, instalment loans, end single -payment loans. The violations woula not need to be classified fully by type but it would he helpful if the princiPal kinds were listed with some indication of their relative im portance. „ "With respoct to item 7--the list of apparently willful olators, the nature of violation ana status of case--we to°, 1_11d like periodic reports from all Federal Reserve Banks 0,2e reasonably complete, prepared according to the Bank's " Judgment of where the line should be drawn between the Parcoently willful and apparently inadvertent. A list as pr v-L-ete as that prepared by the Federal Reserve Bank of San toancisco in its first report, which we understand was sent ad2+1 other Federal Reserve Banks, would seem to be well 'Pt!(r?' for our purposes. "rile enforcement activities of the Bank Examination Deent of your Bank may be covered in one or two general eue4raPhs without following the numbered paragraph plan re' ed for the other data in 6-612." Z Z 4 Zr Approved unanimously. trig as Letter to the Presidents of all the Federal Reserve Banks, readfollows. aemi "Incident to the recent revision of the weekly and for -monthly reports of deposits submitted by member banks Ilankfeserve computation purposes, one of the Federal Reserve rim,: Provides its member banks with a form which calls for to be reported to the nearest even thousana dollars. The to 'Ins for ;?I provided by most of the other Reserve Banks call ' lgures in even hundreds of dollars or in even dollars. 690 5/8/43 -8- ilihether figures are reported in thousands, in hundreds, or in dollars makes little difference from the , s,tandpoint of average required reserves or in penalties lor deficiencies. The preparation of the reports and the Fompilation of statistics from the reports, however, would be facilitated if figures were reported in thousands. In the circumstances it is suggested that all Reserve Banks !?nsider the advisability of adopting a form calling for the reporting of figures in thousands of dollars when the 84134 of existing forms has been exhausted." Approved unanimously. Thereupon the meeting adjourned. re-A-J V00‘ 0 , Secretary.
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